The ability to send clients an invoice electronically has never been easier or simpler. But how do you choose the right online billing service for your small business -- or determine if online invoicing is right for you?

While only you can ultimately determine whats right for your business, Small Business Computing is here to help make the decision process a bit easier, by letting you know what to look for. We also give you an overview of three of the most popular and reliable online billing services -- FreshBooks, Harvest and Zoho Invoice.

The Pros and Cons of Online Billing Software

While online invoicing is easy and inexpensive (even free in some cases), it isnt for everyone -- or every business. If you dont have reliable Internet access, are uncomfortable using the Internet or cloud-based software, or your clients dont have reliable Internet access or dont like doing business online, online invoicing may not be right for you (even though most online invoicing solutions will let you print and even mail invoices to clients).

However, if you have a computer -- or smartphone -- and a reliable Internet connection and send invoices to clients on a regular basis, using an online invoice service can save you both time and money.

Among the many benefits, an online billing service provides anywhere access, meaning you can access your data from anywhere you have an Internet-accessible device. You're not tied to your office computer and can generate and check the status of invoices anytime, anywhere -- a big plus for business owners or managers who are frequently on the road.

Another advantage to using an online billing service, "zero maintenance," stated Raju Vegesna, the evangelist for Zoho and an online invoice expert. When you subscribe to an online (or cloud-based) invoicing service, you dont have to worry about upgrades. "Your invoicing system is always up to date. If the vendor adds a new feature, all you have to do is refresh the browser."

Similarly, assuming the vendor uses the highest level of data protection (the leading online invoicing services do), your financial information is typically safer than if you stored it on a single laptop or desktop at the office.

Finally, theres the speed and transparency that online invoicing provides. A good online invoicing service lets you create, track and manage invoices easily -- even automatically alert customers when an invoice is overdue. You dont have to constantly follow up with customers to see if they received or paid your invoice. Not only does that save you time, it can get you paid faster.

Questions to Ask Before Choosing a Billing Service

Youve made the decision to try online invoicing. How do you choose the right solution for your small business?

"Choosing an invoicing solution purely depends on the users business requirements," explained Zohos Vegesna. "If you send out invoices in multiple currencies, it is important to pick a system that supports multiple currencies."

Similarly, if you regularly send invoices to the same client or clients, its important to choose a solution that supports recurring invoices. And if your customers prefer to make payments online (for example via PayPal or Google Checkout), or they prefer to receive printed invoices (via the mail), choose an online invoicing application that supports those options, he said.

Other questions to ask or think about when choosing an online invoicing solution include:

How long has the vendor been in business -- and has it received favorable reviews?

Before choosing an online invoicing service, read what others have to say (by doing a Google search or checking out online forums). Ask fellow small business owners which service they use and if they are happy with it.

Has the vendor had problems with security and/or data loss or service outage?

Dont be afraid to ask the vendor about security and outages -- and check with other users if they have experienced any outages or loss of data.

Does the service support online payments -- and which online gateways does it integrate with?

While most online invoicing solutions integrate with PayPal, if your clients use or prefer another payment gateway, make sure the online invoicing solution you choose can support it.

Does the service provide online time tracking?

This feature can really save you time -- and it makes generating an invoice simple.